Buying a New Home? 6 Tips for First Time Home Buyers

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This is a sponsored conversation written by me on behalf of The Co-operators. The opinions and text are all mine.

I was 27-years-old the first time I purchased real estate, and it was one of the scariest and most exciting times of my life. My dad had been on my case to buy my first home as he felt I was wasting money on rent year after year, and made a deal with me that he would gift me my down payment if I made a commitment to buy before the year was up.

I remember fretting over the details – where did I want to live? how much could I afford? what if I lost my job and couldn’t afford my mortgage payments? – but looking back, I’m so glad I took the plunge. I decided to take it slow, and it was a good 6+ months before I found the place of my dreams, and while it was a bit of a financial stretch for me at the time, my husband and I sold my gorgeous mid-town Toronto condo for a nice profit 7 years later, which helped us move on to something bigger and better.

If buying a new home is on the horizon for you in the near future, I’ve teamed up with The Co-operators to share 6 of my tips for first-time home buyers to help make the process less daunting.

6 Tips for First Time Home Buyers

SET A REALISTIC BUDGET. When it comes to buying a new home, a lot of first-time buyers underestimate the costs involved. While mortgage payments are certainly a huge chunk of the expenses that go along with home ownership, there are tons of other things to budget for, including a down payment, closing costs, taxes, moving expenses, furniture, and decorations. Make sure to write down all of the upfront costs that come with the actual purchase, and also assess the additional monthly costs you will incur to make sure you aren’t over-extending yourself. You’ll also want to make sure you have an emergency fund set aside for unforeseen costs that crop up when you least expect them to, like a leaky roof, plumbing issues, etc.

Need help getting started with a budget? The Co-operators Home to Be app can help! CLICK HERE to download, or keep reading for more information on how the app can help you make an informed decision on your first (and subsequent) home purchase.

GET PRE-APPROVED FOR A MORTGAGE. While most people obtain a mortgage pre-qualification before they start house-hunting to ensure they are looking at properties that fit within the loan amount they will be approved for, getting pre-approved for a mortgage will ensure a seller knows you are a serious buyer when you submit an offer to purchase their home. This could give you a competitive advantage if multiple offers are submitted as a seller is more likely to want to negotiate with a buyer who is pre-approved.

CREATE A WISH LIST. Once you know what you can comfortably afford to buy and have been pre-approved for a mortgage, it’s time to create a list outlining all of the things you do – and do not – want in a home. Start with the non-negotiable things, like the number of bedrooms and bathrooms you require to accommodate your family, and then add some nice-to-haves that would make a property more appealing to you. A great way to get started is to take stock of the things you love and those that are missing from your current living situation and then build from there.

CHOOSE YOUR IDEAL LOCATION. While we all aspire to live in the nicest neighborhood possible, finding a place that has all of the items on our wish list and still falls within our budget can be difficult. If you can’t afford a house in your dream neighborhood, look for comparable up-and-coming areas that may provide a better bang for your buck. Remember that location can sometimes be a trade-off. Some buyers will forego certain items on their wish list for a home in a specific neighborhood, whereas others place more importance on the functionality of the house they buy. It all comes down to what’s important to you, and sometimes it pays to hold off on a house purchase until your ideal home becomes available.

FIND A REALTOR. While it’s relatively easy to find a realtor to help you buy a home, finding a reputable one you can trust can be a little more challenging. Ask friends and family if they can recommend someone, and make sure to do your due diligence. You want to work with someone with experience who is familiar with the neighborhood you are interested in, and who has a proven track record. How many sales do they typically have each month? Are they willing to provide references from previous clients?

TAKE THE EMOTION OUT OF IT. Buying your first (and subsequent) home is a big deal, but be careful not to get too emotional throughout the process. I have friends who lost out on 3 bidding wars in the neighborhood of their dreams a few years ago, and decided to forego a house inspection on the fourth home they made an offer on for fear of missing out again. Their offer was accepted, and they were left with a home with major structural problems that would have been caught by a home inspector. It has cost them a lot of money and heartache, and serves as an important reminder to use common sense when purchasing a home!

Of course, all of these tips sound great in theory, but one thing I found particularly challenging when I was purchasing my first home was knowing where (and how) to get my hands on important information to help me decide which homes had the things I was looking for while also being within my budget. While the purchase price was obviously important, I was on a set monthly budget and needed to know things like:

Neighborhood comps to see if I had any wiggle room for negotiation in my offer

What my estimated closing costs would be

How much I’d pay for home insurance each month

How close the property was to public transit

Other environmental risks (would the home be susceptible to floods?)

I ended up getting a lot of the information I needed through my real estate agent, but I always questioned whether he was saying things just to appease me so I would hurry up and make a decision so he could earn his sale commission, LOL.

It all ended up working out for me, but when I look back at that time in my life, I really wish I had access to The Co-operators’ award-winning Home to Be app, which provides first-time home buyers all of the information they need to purchase a house that’s right for them:

Home value

Mortgage requirements

Anticipated repair costs

Insurance needs

…and more!

Instead of going old-school like I once did and waiting for your real estate agent and/or mortgage broker to provide you with the information you need to make an informed decision, you can access all of the details you need in a matter of seconds by downloading the app.

The Home to Be app lets you:

Know what a property is worth. Simply type in the address of the home you’re interested in, and you’ll find a low-to-high price range based on similar properties that recently sold within the area.

Estimate your monthly mortgage payments. Enter the asking price and down payment and see what the monthly mortgage payments will be.

Calculate expected insurance premiums. I don’t know if you’re aware of this, but when you have a mortgage, you must also have home insurance, and the Home to Be app helps you calculate what you can expect to pay in premiums.

Uncover hidden costs. Enter repairs you anticipate you’ll have to make on the property, and the app will give you an estimate of the costs.

Find out more about the neighborhood. Check out specific home value estimates, which types of properties are selling faster than others, and overall appreciation/depreciation trends in the neighborhood.

For example, I recently looked up a home I often admired when I drove my daughter to and from preschool a few years ago, and the Home to Be app provided me tons of great info, including how much our mortgage, insurance, and legal closing costs would be if we made an offer with a decent down payment:

Did the price of the house grab your attention? I thought it might! But that’s kind of the point. I love how the app allows potential buyers to look at different areas and REALISTICALLY see if they can afford the mortgage payments, as well as all of the other costs that go along with buying a home.

Whether you’re a first-time home buyer, or a real estate mogul, having access to the right information at the right time can make all the difference in helping you land the home of your dreams.

Gwen is a 40-something freelance writer and social media consultant who has an unhealthy love for makeup, hair, and fashion. She lives with her husband and 8-year-old daughter in Toronto, Canada and hopes to move to a warmer climate someday. Preferably tomorrow.